Galaxy Digital won a bid to buy one of Celsius’s assets as part of bankruptcy proceedings for the crypto lender.
Mike Novogratz’s company will buy GK8, a custodial business that Celsius acquired over a year ago in November 2021.
The custodian plans to launch crypto trading and lending for institutional investors.
Galaxy Digital submitted a successful bid for GK8, a crypto custodial service listed as an asset by Celsius during the lender’s bankruptcy proceedings. Both entity did not disclose the acquisition sum at press time.
GK8 was acquired by Celsius in November 2021 when the bull run was near its peak. Months after, the lender was crippled by slumped crypto prices and Terra exposure. Celsius paused withdrawals shortly after LUNA and UST imploded in May, before declaring bankruptcy in July,
CEO Mike Novogratz said in a statement that adding GK8 to Galaxy Digital’s businesses offers a key ingredient for growth. Novogratz also addressed concerns regarding possible conflict of interest from the deal, ensuring that “clients will have the option to store their digital assets at or separate from Galaxy”.
Adding GK8 to our prime offering at this pivotal moment for our industry also highlights our continued willingness to take advantage of strategic opportunities to grow Galaxy in a sustainable manner.
Galaxy will also expand its workforce by some 40 employees as part of the deal. The firm hopes to onboard blockchain developers and cryptographers to name a few.
Galaxy Digital scoops Celsius asset after $76.8 million FTX exposure
The digital asset firm reported losses in Q3 earnings after weathering contagion from Terra’s $40 billion crash. Galaxy’s earning report also revealed exposure to the bankrupt crypto exchange FTX.
EWN reported that Novogratz’s firm tried to withdraw $47.5 million of the total sum from FTX before Sam Bankman-Fried’s exchange froze withdrawals. The company